Shell Says Hydrogen Is Heavy Transport’s Future. What Now for Biofuels?

by John Parnell (Green Tech Media) A Deloitte report commissioned by Shell finds that the heavy-freight sector is increasingly planning for a switch to hydrogen.

Hydrogen will be the key energy source for global road freight, according to a new report commissioned by European oil major Shell. Electrification is the most economic and environmental solution for smaller delivery vehicles.

The study, carried out by global accountancy firm Deloitte on Shell’s behalf, questioned 158 executives in the road freight sector in 22 different countries. Of those asked, 70 percent ranked decarbonization as a top-three concern for their business.

Many participants interviewed for the Getting into Gear report said they expect hydrogen to be commercially viable in just five to 10 years.

“We believe that once produced at scale, hydrogen will likely be the more cost-effective and viable pathway to net-zero emissions for heavy-duty and long-route medium-duty vehicles, and electric mobility will do the same for light-duty and short-route medium-duty vehicles,” Carlos Maurer, EVP of sectors and decarbonization at Shell, said in a statement. “Shell has already begun taking steps to make these energy solutions available to customers, and we are partnering with others to expand these efforts.”

Hydrogen was not even included in the major policy to drive renewables demand in the transport sector. The European Union’s Renewable Energy Directive set out measures to reach a 20 percent contribution from renewables to total energy demand by 2020. Hydrogen was not added until the policy was redrawn in 2018 to target 32 percent by 2030. Transport fuels have a 14 percent target to hit by 2030.

The reality now, however, is that biofuels are more likely to play their largest role in the short term, while the longer-term chase for zero-carbon fuels has moved past them.

“There was initial hype, then things went quiet again, [and then] in the last 18 months, there has been a huge amount of interest,” Gordon McManus, research director for refining and oil products team for the Europe, Middle East, Africa, Russia and Caspian region at Wood Mackenzie, said in an interview.

McManus said the combination of unfavorable refining economics for more conventional products and hardening carbon-reduction ambitions has seen a number of refineries converting to produce biofuels.

Biofuels offer immediate carbon savings as a drop-in fuel for conventional marine and aviation uses. A shipping company looking to launch a vessel today that will need to operate for several decades will be attracted to switching to biofuels as the sector decarbonizes, with no further investment required, he said. READ MORE